Samsung to curtail expenses, might even lay off some employees

posted by Peter K. / Aug 12, 2014, 5:33 AM

There has been some trouble in Samsung's paradise throughout the past fiscal quarter, as the giant's been experiencing decreasing overall sales and its rivals have been stealing some of its market share on a global scale. Despite the fact that the company is now trailing behind some local manufacturers in certain regions (such as Xiaomi in China and Micromax in India), Samsung is still the dominant player in the industry, but it seems that the high-ranking executives of the Far East behemoth are not satisfied with the current status quo and want to make a difference in the shortest time possible.

According to a recent report, a number of top-end Samsung managers have decided to return their bonuses in order to aid the company in the impending battle against its ever-hungry rivals, which might make things even worse and a lot more difficult for Samsung. Another precaution that Samsung is said to be undertaking is pretty sound as well – a number of expenses and avoidable costs will be cut.

“Samsung is tightening its belt as it is forecast to face tougher competition in the global smartphone market.”

Business trip expenses will be the first to go, as Sammy has allegedly procured talks with roughly 26 airline companies, which will pave the way for cheaper international flights. Its managers spent roughly $38 million for flying fees in 2013 alone, and the company hopes to save up to 20% this way in the future by flying on cheaper airlines.

Another set of speculative theories claims that Samsung might decide to cut down some labor costs. Said in plain language, this means that some employees might get the pink slip. This is just a rumor, fortunately, so we hope that we wouldn't have to report that a major company is showing the door to thousands of its workers once again.

“It could be a possible scenario for Samsung Electronics to start downsizing up to 20 percent of its executives, streamlining subcontractors, unless it see a business pick-up in near future,” anonymous industry insiders claimed.

Let's not forget that if Samsung wants to get back into the spotlight and regain what it lost, it has to re-evaluate its product strategy as soon as possible. The Galaxy Note 4 and the Galaxy Alpha already seem like they might be a step in the right direction, but until they get officially unveiled, nothing else could be said on the matter.

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Posts: 1454; Member since: Mar 29, 2013

Now I think they really should've paid more attention to the S5 (mostly design). Hopefully the Alpha and Note 4 can sell like hotcakes to bump up their revenues otherwise its going to be an average 2014...but Note 4 is beast so hopefully there won't be any more of these news

posted on Aug 12, 2014, 7:10 AM 0

Posts: 37; Member since: Jul 27, 2014

and if note 4 leaks are true, I hope it doesnt sell at all :|
I refuse to believe (as an AMOLED fanboi) that after all those years since GS3, all they can think of to address the design issues - make the ugly fake metal rim even uglier and the whole thing more rectangular so it cuts into your hand.

posted on Aug 12, 2014, 5:38 PM 0

Posts: 320; Member since: May 13, 2014

A step in the right direction would be to renounce that crappy DVFS software that they implemented on kernel level on newer devices because you never expect to buy a device like a Note 3(N9005- my device) and find out if you monitor your cores that after a while of use without reboot they get stuck online and only a reboot can fix this issue or root/install xposed/DVFS disabler module and disable DVFS. There is also a thread on xda about this issue(which I think that people with Note 3 should know) - just google :"xda cores stuck online". Good luck Sammy because you need it !

posted on Aug 12, 2014, 8:54 AM 2

Posts: 6684; Member since: Feb 10, 2012

I love how iphonearena are in a hurry to report whatever article they find that claims Samsung is failing, just becuse you sell less in X month or make less profit in a quarter doesn't mean you should hit the panic button and I am sure that Samsung is calm about this. As a business owner, I know that I can't sustain the same success all over the 12 months of the year, no matter how hard I tried.
It's just amusing how phonearena every single year starts to post such articles not only about Samsung, but as I remember according to their sources HTC was about to be announcing bankruptcy, and that LG might be quitting the smartphone industry, ALLLL around the time the iPhone 5 was about to be announced.

posted on Aug 12, 2014, 6:14 AM 1

Posts: 1021; Member since: Nov 02, 2013

It's actually an old news, about a month old.
Three CONSECUTIVE quarters of decline in operating profit YoY is more than alarming, especially the biggest decline of 24+% in 2014Q2 DESPITE the GS5's launch is really painful.
And as it seems, the upcoming GN4 won't change a thing.
The party is over, Sammy.

posted on Aug 12, 2014, 6:27 AM 9

Posts: 1774; Member since: Jul 30, 2013

They didn't say they should hit the panic button. The said the sad truth. If this trend continues then a downsize will come. And thats an IF. So its an article about speculation that a 5 years old can understand. And you cant obviously.

Posts: 421; Member since: Feb 11, 2014

posted on Aug 12, 2014, 6:46 AM 1

Posts: 1276; Member since: Mar 22, 2014

It's inevitable.
Competition is getting better (LG and SONY being the frontrunners) plus we have Xiaomi's business model that is extremely hard to resist.
Nowhere to go but down now.
In 3 Years or so, online gadget shopping will completely overshadow ''traditional'' shopping.

posted on Aug 12, 2014, 6:15 AM 1

Posts: 248; Member since: May 02, 2012

GreekGeek, largely agree. Perhaps Samsung can do things to stem the flow somewhat, but really, Xiaomi, Oppo and Huawei are really offering great specs and improving quality (which was not that bad to begin with) at prices 20-40%+ less than Samsung for comparable models. That kind of price difference cannot be ignored. If Samsungs sales numbers are to be protected, their handset margins will get hammered. But if they maintain their current prices...forget it.

posted on Aug 12, 2014, 6:21 AM 0

Posts: 1276; Member since: Mar 22, 2014

And SAMSUNG needs to ditch the ''if it's midrange it should be 720p or lesser'' ideology
People are getting sick of that crap.....it is POSSIBLE to create a midrange device and at the same time 1080p......they just refuse to do so because of that stupid business mentality.
Yeah, these Chinese devices are slaughtering them to pieces, and the trend won't probably change anytime soon.
Time to drastically revamp their business model or end up being like NOKIA or Blackberry

posted on Aug 12, 2014, 6:29 AM 1

Posts: 37; Member since: Jul 27, 2014

posted on Aug 12, 2014, 7:24 AM 0

Posts: 248; Member since: May 02, 2012

Actually, the first generation Sony Xperia Z handsets with 1080p screens are now in the low $300 range if you shop around. The top shelf handsets of around 12-18 months ago are still more than a match for today's mid specced bur priced about the same in many cases.

posted on Aug 12, 2014, 6:20 AM 2

Posts: 1276; Member since: Mar 22, 2014

They flood the market with mediocre midrange overpriced devices plus we have several variants of their flagships which is utterly confusing and frustrating, consumers get nothing out of it.
Buyers remorse? hell yeah, you get plenty if you're a SAMSUNG fan

posted on Aug 12, 2014, 6:38 AM 0

Posts: 1126; Member since: Apr 12, 2012

A company that makes +$6billion in quarterly profits tightening up its belt? Love it, Samsung are being extremely proactive, they don't want to be the next Nokia. It will be a long time before they start making a loss, Samsungs are very popular, but I guess they are making sure they cover themselves just in case.

posted on Aug 12, 2014, 6:34 AM 1

Posts: 2072; Member since: Oct 24, 2012

posted on Aug 12, 2014, 6:35 AM 1

Posts: 2326; Member since: Apr 30, 2013

Samsung holds some of the greatest minds and technology on the research and development front of the technological industry. When the time is right, I'm they'll dip further into their extensive and vast resources.
These garbage Chinese vendors aren't reaching many consumers outside of their native territory due to some key factors. Such as a lack of awareness due to little, nearly non-existent marketing or the lack of a quality trust in their brand value. When you're LG and Sony and you command less than 10% of the global market share, it's natural to expect them to increase their holdings at some point.
Albeit, most of their market share value stems from low and mid-ranged devices in developing countries that can't afford the real devices they would ideally like. They still aren't selling even close to the number of high-end phones to be competitive in revenue to Samsung

posted on Aug 12, 2014, 6:42 AM 0

Posts: 1276; Member since: Mar 22, 2014

Unfortunately, they're stagnating....like a musician that is ''on a rut'' for sometime now, they can't even create a good piece of ''musical composition'' so to speak.
They're last great device was the Note 2 (which I proudly own) and it's been like, 2 long years since and they haven't still come up with anything new or moderately mind-blowing at best.
Consumers get tired eventually and they have to find something different.

posted on Aug 12, 2014, 6:52 AM 1

Posts: 421; Member since: Feb 11, 2014

Interesting though isn't it, when you consider that iphone runs a close second with just two phones compared to Samsung's bewildering forest of models. Two distinctly different buisness stratergies, Samsung fills any niche you can think of and IOS has a "one size fits all" approach

posted on Aug 12, 2014, 7:03 AM 0

Posts: 1043; Member since: Sep 28, 2013

Laying off of executives is usually followed by the laying off of ordinary employees, because usually projects and business units which executives led are cut or have redundancy eliminated. Sammy employees, brace yourselves!

posted on Aug 12, 2014, 10:04 AM 0

Posts: 603; Member since: Jul 11, 2012

Samsung need a New Design team in to Really Change how there Looks,as the Galaxy S5 Preforms Superb but the Design is just a Plain Smartphone,that All The Critics have got on Samsungs Design an the Material used,an the phone really should Outstanding to really Attract buyers easily,Hope Samsung can finally learn from there mistake an Stop producing to many low Budget Phones an Start Produce Top Class Premium phones,Galaxy Note 4 will be the next phone for the Critics to pull Samsung down if it does not Offer something New in Design

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